Reduced prices, a boost for household income
The Cost of Living (CoL) is likely drop to its lowest levels in
recent history with the price reduction of essential goods as well as
the unprecedented Rs. 10,000 to the public sector employees and Rs.
3,500 to pensioners.
Certain private sector companies too will soon respond to the Finance
Minister's request to increase the salary of employees.Never in the
recent history of the country that the masses have received such a big
relief and their productivity will certainly increase. Apart from the
salary hike, reduction of fuel and LP Gas prices by a praise-worthy
figure is a major boost for the households, especially the poor and
middle class families.
The Public Administration, Provincial Councils, Local Government and
Democratic Governance Ministry said last week that the public sector
employees will receive a monthly allowance of Rs 5,000 from this month
in addition to the allowance of Rs 3,000 which they have already been
granted by the previous government. That means, their salaries would go
up by Rs. 8,000 while another Rs. 2,000 would be added to their salary
from mid this year.
Hence, President Maithripala Sirisena would keep to his election
promise of Rs. 10,000 salary increase to public sector employees. This
is a salary hike of 47 percent.
At the 2010 presidential election, New Democratic Front candidate
Sarath Fonseka pledged to grant a salary increase of Rs. 10,000 to
public sector employees. But Fonseka narrowly lost the election and his
rival Mahinda Rajapaksa offered only a salary increase of Rs. 2,500.
But at the 2015 presidential election, the common candidate offered
four times more than what President Rajapaksa had offered. Though many
thought that would be another broken promise and would not be practical,
newly elected President Maithripala Sirisena fulfilled that long-felt
dream of public sector employees just weeks after his election as the
The new circular pertaining to the salary increase proposed by the
new government through the interim budget has already been issued under
the signature of Public Administration and Home Affairs Ministry
Secretary J. Dadallage. This salary increase will be granted in
accordance with the pledge made by President Sirisena during the
presidential election to increase salaries by Rs.10,000 for public
sector employees under the 100-day program.
Under the first phase of the program the above salary increase of Rs
5,000 rupees will be added to the salary from this month in addition to
the Rs 3,000 allowance given from last month. With this interim
allowance, the state employees will receive an additional salary
increase of Rs 8,000 from this month.
All ministry secretaries, provincial chief secretaries, all
department heads, chairmen of all state corporations, statutory boards
and government institutions have already been informed to pay this
allowance from February through the 05/2015 Public Administration
In addition, instructions pertaining to the increase in pension were
also included in the above circular. According to the interim budget of
the present government a further increase of one thousand rupees to the
pensioners' allowance, in addition to the 2,500 rupee increase for the
pensioners as proposed through the previous budget will be paid from
This circular which was issued under the title "Revision of the
Allowances of Officers in Public Sector and Pensioners as per Budget
Proposals 2015" with the approval of the Treasury is based on Public
Administration Circulars issued on November 12, 2014 and December
Finance Minister Ravi Karunanayake, in presenting the mini budget in
Parliament last month, requested the private sector employers to
increase the salaries of employees by Rs. 2,500.
The budget also proposed to grant an allowance of Rs 20,000 for
pregnant mothers as pledged under the Hundred Day Program.
The mini budget also granted a certified price of Rs 50, Rs 80, Rs
350 and Rs 80 to paddy, potato, rubber and raw tea leaves when they are
purchased from farmers.The certified price for fresh milk at Rs 70 which
is an increase by Rs 10 is noteworthy.
The price of kerosene would be reduced by Rs 6 while the prices of 13
essential items have been reduced by the removal of taxes. The price of
sugar has been reduced to Rs 85 a kilogram while the price of milk
powder has been reduced to Rs 325 (400g). The price of Sustagen milk
powder has been reduced by Rs. 100 (400g). Flour, bread, green gram,
sprats will be reduced by Rs 12.50 per kilo, Rs. 6, 40 per kilo, Rs. 15
per kilo respectively.
The new Government led by Prime Minister Ranil Wickremesinghe has
taken several meaningful steps to reduce cost of living and improve the
living standards of people, especially those in the lower and middle
Prices of several essential goods too have been reduced, making a
direct impact on the cost of living. The price of canned fish was
reduced by Rs 60 in the market while corriander and Maldive Fish was
reduced by Rs 20 and Rs 200. The price of a 12.5kg cylinder of gas was
reduced to Rs. 1,596 which is a reduction by Rs. 300. The tax on
vehicles below 1000 CC capacity was reduced by 15 percent.
Bus fares have now been reduced by 10 percent. The minimum fare for
the first section has now gone down to Rs. 8. Senior citizens too have
benefited from the new economic policies of the Government. Senior
citizens with Rs. 1 million in their bank accounts will be given a 15
percent interest rate while the interest on gold jewelery pawned at
banks, that don't exceed Rs. 200,000 in value will be waived off
completely. It was also proposed to waive off 50 percent of the loans
borrowed by farmers.The fertilizer subsidy which was provided by the
previous government will be continued.
What is unique in the recently presented mini budget was the decision
to save Rs 2.5 billion by cutting down on the number of ministers. But
the decentralised budget of ministers will be increased from Rs. 5
million to Rs 10 million, enabling them to embark on more public
projects in their districts.
The Government and President Sirisena have made special emphasis on
the farmer community, taking some vital steps to protect them. President
Sirisena, addressing a function held under the theme Janabhinandana
Mangallaya at Medirigiriya on Monday said that there is an urgent need
to ensure a continuous income for farmers especially the paddy farmers.
The President has said that he is well aware that mainly the paddy
farmers are undergoing financial difficulties notwithstanding the
increasing of paddy prices or implementing a fixed price for paddy.
The Treasury will release Rs.10 billion to purchase Maha harvest
These monies would be utilised to purchase a kilo of Samba paddy at
Rs.50 from farmers. Paddy will be purchased through the registered
farmer associations across the country until April. Plans are afoot to
purchase the first stock of paddy from Ampara, Kurunegala and Mullaithvu.
"Though paddy prices have been increased several times, paddy
cultivators are undergoing financial hardships. It indicates to us that
there is something wrong with this. We understand that it is due to the
farmers not receiving a continuous income throughout the year. It is
only during the harvesting season that the paddy farmers receive an
income. Therefore, a mechanism will be put in place for farmers to
receive a continuous income," the President was quoted as saying.
These measures will be taken after considering the market trends and
latest technology available in the agriculture field, the President
said. The President admiring the bold decision of people of the country
to end the former corrupt regime said that their sacrifices were bearing
fruit today.Under the 100-Day program of the Government several positive
measures and initiatives have already been taken to benefit the people
and the country. Under this program a new constitution is being
Steps are being taken to end corruption and fraud. A Presidential
Commission will be appointed next week to expedite the process of
inquiring into corruption.
Although the Government has taken steps to help the masses and bring
down cost of living, the full benefit of the tax reductions and price
reductions have still not been fully passed to the customers.
For an example, although the petrol and diesel prices were reduced by
a notable amount, those who operate school and office vans are yet to
pass the benefit fully to their commuters.
There is no exception with three-wheel and other taxi services as
most of them still maintain the same fare structures. Despite the
reduction of LP Gas and wheel floor prices, confectionary/ bakery items
other than bread have not been reduced.
Hence, it is the duty of the Consumer Affairs Authority to make sure
that the benefit of the Government price reductions are fully passed to
the masses. If not it would be the middlemen and the traders who would
make merry although the Government is making a sincere effort to reduce
the Cost of Living.